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Fed buys bonds - PowerPoint PPT Presentation

Monetary Policy

Monetary Policy. Chapter 13. Fed Controls Reserves but not the M s. Banks may not want to lend. Public may not want to borrow. OMO: What can go wrong?. Loans are not deposited in the banking system. Fed buys bonds from the public or banks. Fed increases banking system reserves.

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Fed buys bonds - PowerPoint PPT Presentation

Monetary Policy